Solved

Match the Term with the Correct Definition

Question 180

Matching

Match the term with the correct definition.

Premises:

Responses:

accounting rate of return

A formal means of analyzing long-range investment decisions.

net present value

The length of time it will take to recover through cash inflows the dollars of a capital outlay.

internal rate of return

The decision model that computes the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to their present value, using a minimum desired rate of return.

capital investment analysis

A measure of profitability computed by dividing the average operating income that an asset generates by the average amount of the investment in the asset.

payback period

A stream of equal cash flow amounts.

annuity

The rate of return that makes the net present value of a project equal to zero.

Premises:

accounting rate of return

net present value

internal rate of return

capital investment analysis

payback period

annuity

Responses:

A formal means of analyzing long-range investment decisions.

The length of time it will take to recover through cash inflows the dollars of a capital outlay.

A measure of profitability computed by dividing the average operating income that an asset generates by the average amount of the investment in the asset.

A stream of equal cash flow amounts.

The rate of return that makes the net present value of a project equal to zero.

Correct Answer:

Premises:

Responses:

accounting rate of return

net present value

internal rate of return

capital investment analysis

payback period

annuity

Related Questions